When the proceedings are suspended, the financial proceedings stop in tax disputes. The suspension of proceedings in financial disputes is regulated both in § 363 AO and in § 74 FGO. We explain what the suspension of the procedure means, how the two standards relate and what the consequences of the suspension are.

The aim of the suspension of the proceedings is to make the financial law process economical and to avoid contradictory decisions. In addition, the Federal Constitutional Court and the Federal Finance Court (BFH) should not be called up with a large number of similar cases and thus overburdened.

The suspension of the procedure results in a standstill of the procedure so that the procedure does not continue. Consequently, a decision concluding the proceedings may not be issued in this respect. Therefore, for example, no deadlines expire. In addition, legal acts of the parties and judicial acts are ineffective. However, the tax authorities may change the tax notice issued. Suspension of proceedings may also have the effect of incorporating decisions of another court or administrative authority on issues relevant to the decision into the suspended decision. Of course, this can benefit both the tax office and the taxpayer. On the other hand, the right to effective and timely legal protection may prevent the stay of proceedings, so that the parties may also suffer disadvantages from the stay of proceedings, since the proceedings are slowed down in this respect.

However, the suspension of the proceedings must be clearly separated from the interruption of the proceedings. The interruption occurs by law and without a prior decision of the tax authority. Therefore, the interruption of proceedings concerns cases such as the opening of insolvency proceedings or the occurrence of universal succession in the event of inheritance.

In addition to the suspension of the proceedings, the draft regulation scrutiny to the Federal Constitutional Court or the request for a preliminary ruling to the ECJ also lead to the standstill of the proceedings.

§ 74 FGO empowers the tax courts (and the BFH via § 121 sentence 1 FGO) to suspend the court proceedings.

Suspension according to § 74 FGO requires that the decision is dependent on the existence or non-existence of a legal relationship. This legal relationship must be the subject of another judicial dispute or be established by another administrative authority. The term “legal relationship” refers to a specific, legally regulated relationship of a person to other persons or to objects. This relationship may be civil, public or fiscal. However, a possible change in the law is not a legal relationship in this sense. It is necessary that the decision depends on the legal relationship. This is the case if the legal relationship legally influences the decision. However, this is lacking when the matter itself is ready for decision and the legal relationship in need of clarification therefore only concerns side issues.

The judicial dispute in which the legal relationship in question is decided does not have to be pending. It is sufficient, therefore, that the court orders the parties to bring the dispute before the court, within a time limit. For the administrative decision, however, it is sufficient that there is a reasonable prospect of initiating such a procedure. There is therefore no longer a suspension if the anticipatory procedure is concluded or no longer pending and the legal relationship has been decided or not. Then the decision must either be based on the procedure or the question itself must be decided.

The procedure may be suspended in any type of procedure. All that is required is that the procedure is permitted. It can therefore also be suspended in the review procedure. However, this does not apply if it seeks to clarify an actual finding that can no longer be observed by the BFH. In addition, no suspension is conceivable in temporary legal protection because of its urgent need.

3. Suspension of proceedings pursuant to § 363 AO

§ 74 FGO was a model for the suspension of the procedure according to § 363 AO. Section 363 (1) AO concerns the suspension of proceedings in out-of-court proceedings because of an anticipatory legal relationship. Therefore, § 363 (1) AO is the basis for the authorization of the tax authorities to suspend the financial authority procedure. It is therefore also a question of avoiding conflicting decisions. Thus, the procedure is regularly suspended if the tax office wants to wait for actual investigations of another court.

Suspension of execution requires an admissible objection. However, it does not matter how the objection was justified, since the tax office has to comprehensively re-examine the facts anyway.

In addition, the suspension of execution is at the discretion of the authority. When exercising discretion, the authority shall, in particular, take due account of the principle of acceleration and consider it in the balance. Nevertheless, the discretion may be reduced to zero in individual cases. The authority must grant the suspension in writing or electronically, but does not require the consent of the complainant. In addition, according to § 363 paragraph 2 AO, the tax office also has the opportunity to suspend the proceedings. Both options are independent of each other, so that the tax office can choose the most practical way.

Suspension of proceedings is not related to the request, but is issued ex officio. However, it can be suggested by the parties involved in the procedure. The parties shall be heard before the proceedings are suspended. It shall determine whether they are interested in ending the process without delay or whether a suspension would be in their interest.

The decision on the suspension of the tax court proceedings is made by order. Against the decision of the tax court, the complaint is given.

In the financial procedure, the taxable person may object to the suspension order. In the other cases, however, according to § 363 paragraph 3 AO, the appeal decision must be brought before the tax court. This must therefore be done in particular if a request for suspension that you have made has been omitted. This is to prevent further disputes from delaying the decision on material issues. If, on the other hand, the authority suspends the proceedings without the conditions being met, the action for inaction shall also be admissible.

Where the decision indicates a specific event at which the suspension ends, it shall end without further decision. For example, the suspension ends with the issuance of the decision if the proceedings are suspended until the issuance of the anticipatory decision. Otherwise, the court or tribunal may, after hearing the parties, annul the order of stay and resume the proceedings if the conditions of the stay have ceased or there are particular reasons for the continuation of the proceedings. The parties may also lodge a complaint against this.

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